EU court throws out EU ruling against Belgian tax break for large firms

February 14, 20190

Night shot of illuminated city business district in Brussels, Belgium August 13, 2017. REUTERS/Eric Vidal

LUXEMBOURG/BRUSSELS (Reuters) – EU judges dealt a possible blow to an EU crackdown against tax avoidance by global multinationals on Thursday by annulling an order by the EU executive against a Belgian tax-break scheme for about 35 large companies.

The anti-avoidance drive led by Competition Commissioner Margrethe Vestager has included orders to Ireland to recover some 13 billion euros from iPhone maker Apple and to Luxembourg to claw back up to 30 million euros from Fiat Chrysler, 250 million euros from Amazon and about 120 million euros from France’s Engie.

The Netherlands has been told to recover between 20-30 million euros from Starbucks.

It is not yet clear how much of an impact the decision by the General Court, the lower branch of the Court of Justice in Luxembourg, may have on other cases. Legal experts will be scrutinising the detail of the Belgian ruling.

“The General Court annuls the Commission’s decision concerning tax exemptions granted by Belgium by means of rulings,” the EU tribunal said in Luxembourg.

“The Commission wrongly considered that the Belgian system relating to the excess profit of multinational companies constituted an aid scheme,” it said.

The case involved Dutch industrial company Magnetrol and Belgium which took their cases to the General Court after the Commission in 2016 ordered Belgium to recover some 700 million euros from the companies which benefited from the scheme.

Reporting by Francois Aulner in Luxembourg and Foo Yun Chee in Brussels; Editing by Alastair Macdonald